Delivering online orders: how fast is too fast?
In less than a decade, the logistics industry has developed the necessary infrastructure and systems that are capable of delivering items for orders placed online in a matter of days, or even hours. The whole process – from placing an order on a website, platform or app, to a package’s arrival at the doorstep – has become so effective that a parcel not delivered within a few days can cause some customers to frantically seek out information on tracking systems of the status of their orders. As a result, the customer demand for fast deliveries has been increasing rapidly, and several studies conducted both by academia and industry place speed among the top-two factors for e-commerce delivery, along with cost.
Delivery privilege
Even though there are, indeed, certain orders where speed is imperative, one cannot help but wonder: how fast is fast enough? How often do online shoppers leave packages at the front door because they arrived faster than expected? How often are orders delivered so fast that the parcel was left unopened for days? These behaviours reveal a very interesting phenomenon: that the provision of fast and cheap delivery might once have satisfied a real need. Today, however, it’s often a matter of having the opportunity to receive something quickly or feeling privileged to do so because of pre-paid subscription delivery programmes.
At the same time, customers have partially adapted to slower deliveries and perhaps realised that speed is not always as important as they might have thought. Instead, reliability and access to delivery services emerge as not only preferable, but often imperative factors. Our recent research at the University of Bath shows that the COVID-19 experience has made consumers more willing to wait a few extra days for the delivery of their online orders. Along with colleagues Mrs Yi Liu and Dr Fotios Petropoulos at the Centre for Smart Warehousing and Logistics Systems, we have been investigating how customers respond to different monetary incentives in return for accepting slower deliveries for their online shopping.
Even though the majority of customers still value speedy deliveries and are not willing to sacrifice this service for a discount, there seems to be a substantial part of the market interested in receiving their online shopping with a delay (even up to a couple of weeks) for the right monetary incentives. Perhaps more importantly, our latest results collected after the pandemic indicate that there are now more people willing to accept slower deliveries and that they are happy to do so for smaller discounts in return. This might as well indicate a slow shift of behaviour patterns and priorities. The pandemic aside, academics in Europe and the US have started finding evidence that factors such as flexibility can be equally important (if not more) for certain customers and types of orders.
Time is money
Having more time to prepare and deliver an online order can lead to numerous benefits for logistics providers. First and foremost, more time will be available to plan and manage operations thus offering more flexibility to deal with disruptions but also more time to draw optimal plans. Moreover, the cost of service can be potentially reduced as slower deliveries are often cheaper to set up and run. A side effect is that more time can be given to customers to amend their orders (add/replace items, change delivery address etc) thus reducing the number of missed deliveries, returns and orders with only a small number of items in them – a change that could reduce the CO2 emissions, too.
Fast and ultra-fast delivery is important, and it is here to stay, but in a world where adaptability and convenience become increasingly important, is it time to re-prioritise the focus of online shopping fulfilment?
